CBD has the highest wages

Docklands and CBD workers are the highest paid in the state, according to a new Federal Government report.

The State of Australian Cities 2014-2014 report, which was published in July, includes a map showing the highest hourly rates in the state are being paid in postcodes 3008, 3000 and 3006 (Southbank).

It reports that between 2011 and 2012 Docklands’ workers are paid more than $90 per hour, while the figure in the CBD was between $80 and $90 per hour. Southbank workers earned between $70 and $80 per hour.

The report concludes that these small but high-performing areas need to be protected because they are so important to the national economy.

“Ensuring that Australia’s most productive regions – the inner areas of its cities – remain unconstrained, efficient and productive is critical,” it concluded. “With such dense economic activity occurring within these relatively small areas, even minor inefficiencies can have a major impact on Australia’s national economy and remedying those inefficiencies can reap large economic benefits.”

Population growth in inner Melbourne is also occurring at a faster rate than in other capital cities. The report says: “Between 2012 and 2013, the two inner city areas in Australia with the largest population increases were both in inner Melbourne: the SA2 areas of Melbourne and Southbank grew by 5400 and 2100 additional people respectively over the year.”

But inner city growth and wealth has a flipside – a growing social divide between the inner and the outer metropolitan areas.

As the local economy evolves from a largely manufacturing base to business and other service industries, the inner city is thriving at the expense of the suburbs.

Housing affordability is another measure of growing social inequality, with the report publishing a telling map charting the affordability of housing across Melbourne between 1981 and 2006.

In 1981, most housing across Melbourne was affordable to low to moderate income earners. By 2006, this phenomenon had been turned on its head with only the outer extremities remaining affordable.

“In terms of the built form of cities, this price premium is having ramifications for the type of urban development that is occurring,” the report says. “Marked increases in density are occurring where price premiums are highest. This price premium is also facilitating substantial changes in the type of dwellings that are being provided.”

“Australia’s cities are now increasingly characterised by the significant spatial divide between areas of highly productive jobs and the areas of population based services, reflected through the price premiums associated with houses that have better access to the city centre.”

The same inequities show up in a study of distance between home and work, with the outer suburban dwellers facing significantly longer times in traffic.

While not advocating any suggested solutions, the report notes growing concern of the consequences of the growing social divide.

“There are concerns held by researchers, state governments and local councils that while land release on the urban fringe may have once been a valid strategy for boosting the supply of affordable housing, this approach may be increasingly problematic,” the report says.

“Recent research undertaken by the Australian Housing and Urban Research Institute (AHURI) concluded for those cities under study, Sydney, Brisbane and Melbourne, that clusters of social disadvantage were increasingly being pushed further towards city peripheries over the period 2001–11.

The report notes that the outward movement of social disadvantage is being driven by housing affordability factors and it poses new challenges, because these areas are already poorly resourced in terms of accessible jobs, transport, facilities and services.”